FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS FIRST QUARTER RESULTS

New York, New York, May 11, 2009: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the first quarter ended March 31, 2009.

 

First Quarter 2009 Compared to First Quarter 2008:

·   Net sales declined 27% to $90.4 million from $123.2 million; at comparable foreign currency exchange rates, net sales were down 21% for the period;

·   European-based operations achieved sales of $82.0 million, down 26% from $110.6 million;

·   Sales by U.S.-based operations declined 33% to $8.4 million from $12.6 million;

·   Gross margin was 59% compared to 60%;

·   S, G & A expense as a percentage of sales was 48% compared to 45%;

·   Operating margins were 11.4% of sales compared to 15.5%;

·   Net income attributable to Inter Parfums, Inc. declined 35% to $7.3 million from $11.1 million; and,

·   Diluted earnings per share attributable to Inter Parfums, Inc. common shareholders were $0.18 compared to $0.28.

 

Jean Madar, Chairman and CEO of Inter Parfums, noted, “As we previously reported, the global economic crisis and its impact on discretionary consumer spending were certainly factors in the comparable quarter decline in sales, but there were other reasons as well.  The strength of the U.S. dollar relative to the euro had the net effect of depressing 2009 first quarter sales by about 6% as compared to last year.  Also, significant growth in the first quarter of 2008 as compared to the first quarter of 2007 made for a difficult comparison.  Burberry The Beat for women, our largest ever global fragrance launch, commenced in the first quarter of last year.  In addition, sales by U.S.-based operations surged 31% from the first quarter of 2007 as we added a new international element to our domestic business.”

 

Discussing factors impacting profitability, Russell Greenberg, Executive Vice President & CFO, pointed out, “Since European-based product sales to U.S. customers are denominated in dollars while costs are incurred in euro, we had expected an increase in the gross margin percentage in the first quarter of 2009.  However, the gross margin benefits stemming from currency exchange rates were offset by sales mix issues within individual product lines, resulting in the decline in gross margin percentage.  Another factor skewing our comparable quarter operating margins relates to advertising expenditures associated with Burberry The Beat for women.  As previously disclosed, advertising expenditures associated with the launch were predominantly incurred in the second quarter of 2008, while most of the sales of Burberry The Beat for women were recognized in the first quarter of 2008.  With lower sales expected in 2009 compared to 2008, our advertising and promotional spending budgets have been adjusted to align our spending with anticipated sales. We are again affirming our 2009 guidance, with net sales of $390 million, net income of approximately $21.0 million or $0.70 per diluted share, assuming the dollar remains at current levels.”

 

Mr. Madar went on to say, “We are in the midst of our 2009 new product launch schedule for our European-based operations which began with the global rollout of the men’s version of Burberry The Beat.  This was followed by the Lanvin L’Homme Sport line.  We also have a new Paul Smith fragrance for men, a Quiksilver signature fragrance for men, a limited edition, high-end Van Cleef & Arpels women’s fragrance, aptly named Collection Extraordinaire, in the pipeline for this year.  With regard to U.S.-based operations, last month Close, a new Gap fragrance was launched at approximately 550 Gap stores and roughly 175 Gap Body stores nationwide with international distribution into 5,000 doors on schedule for the second half of 2009.  In August 2009, we have new fragrances for men and women scheduled for launch at Banana Republic stores in North America with international distribution soon after.  As we’ve reported, Black Fleece, the new Brooks Brothers New York collection for men and women, our signature bebe fragrance for women, and a new fragrance for New York & Company are all in our rollout schedule this year.”

 

Cash Dividend

The Company’s next regular quarterly cash dividend of $.033 per share will be payable on July 15, 2009 to shareholders of record on June 30, 2009.

 

Conference Call

The management of Inter Parfums will host a conference call at 11:00 am EDT on Tuesday, May 12, 2009, to discuss first quarter results and other recent developments.  Interested parties may participate by calling 706-679-3037, approximately 10 minutes before the start of the call.  This conference call will also be distributed live over the Internet via the Investor Relations section of the Company’s web site at www.interparfumsinc.com.  To listen to the live call, please go to the web site in advance to register.  If you are unable to listen live, the conference call will be archived at the web site. 

 

Inter Parfums, Inc. develops, manufactures and distributes prestige perfumes and cosmetics as the exclusive worldwide licensee for Burberry, Van Cleef & Arpels, Paul Smith, S.T. Dupont, Christian Lacroix and Quiksilver/Roxy.  The Company also owns Lanvin Perfumes and Nickel, a men’s skin care company.  It also produces personal care products for specialty retailers under exclusive agreements for Gap, Banana Republic, New York & Company, Brooks Brothers and bebe brands.  In addition, Inter Parfums produces and supplies mass market fragrances and fragrance related products.  The Company’s products are sold in over 120 countries worldwide.

 

Statements in this release which are not historical in nature are forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. In some cases you can identify forward-looking statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will" and "would" or similar words. You should not rely on forward-looking statements because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors. These factors include, but are not limited to, the risks and uncertainties discussed under the headings “Forward Looking Statements” and "Risk Factors" in Inter Parfums' annual report on Form 10-K for the fiscal year ended December 31, 2008 and the reports Inter Parfums files from time to time with the Securities and Exchange Commission. Inter Parfums does not intend to and undertakes no duty to update the information contained in this press release.

 

Contact at Inter Parfums, Inc.                          or       Investor Relations Counsel

Russell Greenberg, Exec. VP & CFO                          The Equity Group Inc.

(212) 983-2640                                                           Linda Latman  (212) 836- 9609/llatman@equityny.com

rgreenberg@interparfumsinc.com                                Lena Cati  (212) 836-9611/lcati@equityny.com

www.interparfumsinc.com                                          www.theequitygroup.com

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

 

 

Three months ended
March 31,

 

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

   Net sales

 

$                   90,409

 

$                 123,163

 

 

 

 

 

   Cost of sales

 

                     36,844

 

                     49,075

 

 

 

 

 

   Gross margin

 

                     53,565

 

                     74,088

 

 

 

 

 

   Selling, general and administrative expenses

 

                     43,263

 

                     54,943

 

 

 

 

 

   Income from operations

 

                     10,302

 

                     19,145

 

 

 

 

 

Other expenses (income):

 

 

 

 

        Interest expense

 

                       1,312

 

                       1,071

        (Gain) loss on foreign currency

 

                      (1,379)

 

                          367

        Interest income

 

                         (508)

 

                         (613)

 

 

 

 

 

 

 

                         (575)

 

                          825

 

 

 

 

 

Income before income taxes

 

                     10,877

 

                     18,320

 

 

 

 

 

  Income taxes

 

                       3,621

 

                       7,184

 

 

 

 

 

  Net income

 

                       7,256

 

                     11,136

 

 

 

 

 

Less: Net income attributable to the noncontrolling interest

 

                       1,828

 

                       2,428

 

 

 

 

 

Net income attributable to Inter Parfums, Inc.

 

$                     5,428

 

$                     8,708

 

 

 

 

 

Earnings per share:

 

 

 

 

Net income attributable to Inter Parfums, Inc. common shareholders:

 

 

 

 

            Basic

 

                 $0.18

 

                 $0.28

            Diluted

 

                 $0.18

 

                 $0.28

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

            Basic

 

                     30,166

 

                     30,721

            Diluted

 

                     30,166

 

                     30,808

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

                 $0.033

 

                 $0.033

 

 

 

 

 


 

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

 

ASSETS

 

 

March 31,

2009

 

December 31,
2008

 

 

(unaudited)

 

 

Current assets:

 

 

 

 

        Cash and cash equivalents

 

$                   33,853

 

$                   42,404

        Accounts receivable, net

 

                   113,942

 

                   120,507

        Inventories

 

                   121,215

 

                   123,633

        Receivables, other

 

                       2,086

 

                       2,904

        Other current assets

 

                       6,906

 

                     10,034

        Income tax receivable

 

                       1,346

 

                       1,631

        Deferred tax assets

 

                       3,574

 

                       3,388

 

 

 

 

 

                            Total current assets

 

                   282,922

 

                   304,501

 

 

 

 

 

  Equipment and leasehold improvements, net

 

                       8,037

 

                       7,670

 

 

 

 

 

  Goodwill

 

                       5,238

 

                       5,470

 

 

 

 

 

  Trademarks, licenses and other intangible assets, net

 

                     99,144

 

                   104,922

 

 

 

 

 

  Other assets

 

                          896

 

                       2,574

 

 

 

 

 

                            Total assets

 

$                 396,237

 

$                 425,137

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

        Loans payable – banks

 

$                   11,994

 

$                   13,981

        Current portion of long-term debt

 

                     11,752

 

                     13,352

        Accounts payable - trade

 

                     60,128

 

                     66,236

        Accrued expenses

 

                     29,074

 

                     35,368

        Income taxes payable

 

                          557

 

                          442

        Dividends payable

 

                          996

 

                          996

 

 

 

 

 

                            Total current liabilities

 

                   114,501

 

                   130,375

 

 

 

 

 

Long-term debt, less current portion

 

                     23,751

 

                     27,691

 

 

 

 

 

  Deferred tax liability

 

                       9,568

 

                     11,562

 

 

 

 

 

  Equity:

 

 

 

 

        Inter Parfums, Inc. shareholders’ equity:

 

 

 

 

            Preferred stock, $.001 par; authorized

                1,000,000 shares; none issued

 

 

 

 

            Common stock, $.001 par; authorized 100,000,000

               shares; outstanding 30,108,939 and 30,168,939 shares
               at March 31, 2009 and December 31, 2008, respectively

 

 

 

                            30

 

 

 

                            30

            Additional paid-in capital

 

                     42,070

 

                     41,950

            Retained earnings

 

                   172,518

 

                   168,025

            Accumulated other comprehensive income

 

                     13,205

 

                     25,515

            Treasury stock, at cost, 10,026,379 and 9,966,379                               common shares at March 31, 2009 and December 31,                              2008, respectively

 

 

 

                   (31,668)

 

 

 

                   (31,319)

 

 

 

 

 

                    Total Inter Parfums, Inc. shareholders’ equity

 

                   196,155

 

                   204,201

 

 

 

 

 

            Noncontrolling interest

 

                     52,262

 

                     51,308

 

 

 

 

 

                                Total equity

 

                   248,417

 

                   255,509

 

 

 

 

 

                                    Total liabilities and equity

 

$                 396,237

 

$                 425,137